The Auditing and Assurance Standards Board (AASB) proposes, subject to comments received following exposure, to adopt, with appropriate amendments, if any, proposed International Standard on Assurance Engagements (ISAE) 3410, Assurance Engagements on Greenhouse Gas Statements, issued by the International Auditing and Assurance Standards Board (IAASB) for use in Canada. The result would be a new Canadian Standard on Assurance Engagements (CSAE) 3410 with the same title.
Increasing attention is being given to the link between GHGs and climate change. Many entities are quantifying their GHG emissions for internal management purposes, and an increasing number are also preparing a GHG statement:
- as part of a regulatory disclosure regime;
- as part of an emissions trading scheme; or
- to inform investors and others on a voluntary basis about the entity’s GHG emissions.
Key issues that this project is addressing include:
Suitability of criteria
- What are the characteristics of suitable criteria to evaluate GHG statements (for example, relevance, completeness, reliability, neutrality and understandability)?
- How should the characteristics be applied to determine whether a particular set of criteria is suitable?
- Should the ISAE specifically name any particular sets of criteria that have achieved general acceptability?
Using the work of an expert
- How can the engagement team best obtain access to the environmental, scientific and engineering expertise required to perform assurance engagements focused on various types of GHG information?
Level of assurance
- Should the ISAE address both reasonable assurance and limited assurance engagements?
Evidence gathering procedures
- What are the risk factors professional accountants should consider when providing assurance on GHG statements?
- What requirements and guidance are needed on the nature, timing and extent of procedures?
Form and content of the assurance report
- What should be the form and content of the assurance report?
Subject to comments received on proposed ISAE 3410, the IAASB intends to finalize the revised standard in late 2011 or early 2012. The AASB expects to finalize CSAE 3410 shortly after the IAASB finalizes ISAE 3410.
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